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Bombardier says U.S. joins investigation into Indonesian jet deals

05/06/2021 | 04:29pm EDT
FILE PHOTO: Bombardier's logo is seen on the building of the company's service centre at Biggin Hill

MONTREAL (Reuters) -The United States has joined an international investigation into suspected bribery related to decade-old sales of Bombardier jets to Garuda Indonesia, the Canadian planemaker said on Thursday.

Bombardier, the latest aerospace group to face scrutiny over middlemen in past jet deals, said the U.S. Department of Justice requested documents and information in February relating to the acquisition and lease of its CRJ1000 aircraft to the Indonesian airline between 2011 and 2012.

A Bombardier spokesman said the company was cooperating fully.

In November, Britain's Serious Fraud Office said it was investigating Bombardier over suspected bribery in the transactions.

Authorities in Britain, France and the United States struck a record $4 billion bribery settlement with Europe's Airbus last year, as well as an $800 million plea deal with British engine maker Rolls-Royce in 2017.

Both settlements covered sales of planes or engines to several airlines including Garuda.

Garuda could not be reached for comment outside business hours.

In May 2020, an Indonesian court handed Emirsyah Satar, Garuda chief executive from 2005 to 2014, an eight-year jail sentence for bribery and money-laundering related to the procurement of planes and engines from Airbus and Rolls-Royce.

In November, after Britain's SFO announced its investigation into Bombardier, Garuda's current CEO and the Indonesia government pledged to cooperate with relevant authorities.

NO 'SELF REPORT'

Bombardier has undergone several changes of leadership since the deals and has sold most aerospace activities, including the CRJ regional jets.

Its new management now faces parallel probes that can take years, according to lawyers familiar with similar cases, and can also require the company to dive deep into its records using outside lawyers.

Under deferred prosecution agreements used in past aerospace corruption probes in Britain, the United States and elsewhere, companies suspected of corruption can avoid corporate criminal charges by paying fines and making sweeping internal changes.

Fines can be reduced if a company takes any suspicions it may have about its conduct directly to prosecutors, a process known as "self-reporting," before being approached by them.

Airbus last year won a discounted fine for such early disclosure, but only after cooperation that included mounting its own four-year investigation spanning 60 million documents held by 800 people, forensic data firm FRA told the BBC.

Bombardier says its own sequence of events was different.

"When the SFO reached out we knew nothing about this. And then yes we started our own investigation internally," Chief Executive Eric Martel told reporters.

"So far we've been looking at it since the SFO reached out and now the DOJ is reaching out but you know on our side we haven't found anything. But we will definitely continue to collaborate."

Britain's Rolls-Royce failed to approach the SFO first but still avoided a larger fine by later showing what a British judge termed "extraordinary" cooperation.

This week, the SFO ended a separate criminal investigation into individuals associated with Airbus, according sources familiar with the investigation.

(Reporting by Allison Lampert, Tim Hepher and Bernadette Christina; Editing by David Clarke and David Gregorio)

By Allison Lampert and Tim Hepher


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
AIRBUS SE -1.76% 112.58 Real-time Quote.27.65%
PT. GARUDA INDONESIA (PERSERO) TBK -1.77% 222 End-of-day quote.-44.78%
ROLLS-ROYCE HOLDINGS PLC -3.09% 108.5 Delayed Quote.0.60%
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